Four Key Finance Essentials every business needs to know

The current business environment is dynamic and challenging in many ways.

Technological innovation, the digital economy and automation are all constantly developing themes that impact business owners, the products they sell and the people that buy them. Successful businesses need to understand and be able to adapt their strategies to these opportunities and challenges.

Regardless of the business you operate, you’ll need to make sure you are not restricted by lack of working capital, equipment finance or property finance.

Successful businesses will have different profit-driving strategies but most will include:

  • Business growth – The ability to expand operations and increase revenue
  • Automation – Driving production efficiencies to boost the bottom line
  • Improving systems – Integrating software to improve efficiencies and reduce wastage
  • Acquisition – The ability to acquire competitors or other upstream businesses as opportunities arise
  • Overseas/Interstate expansion – Gaining access to new and profitable markets as well as streamline distribution channels
  • Developing new products – Product innovation for competitive advantage, increased margins, or customer growth

Whatever your long term business strategy is, it’s important you have the necessary finance in place to ensure you can take full advantage of your opportunities as they arise.

Securing the right finance can seem like a daunting task but it doesn’t have to be. Here are our Four Key Finance Essentials to keep in mind when planning the future of your business:

1. Long Term Strategy

The old adage of, “think long term and act short term” has never been more relevant. A successful business will have the end game in sight and a long-term business strategy in place.

Execution of the strategy requires access to more working capital, commercial finance and equipment finance and in amounts greater than you ever think you will ever need. Access to the three finance fundamentals of working capital, equipment finance and property finance will ensure your business is able to take full advantage of profit-driving strategies.

Your long term business strategy should include surrounding yourself with financial experts you can trust. Build your fortress with the best accounting and independent financial experts you can and you’ll find you’re well-positioned to achieve your long term goals.

2. Balance

It’s never a good idea to put all your eggs in one basket, especially when it comes to financing your business. By restricting yourself to one lender or one main bank, you risk over exposing yourself and limiting the funds available to you or having the financier dictate terms.

Healthy business decisions are based on choosing between options, not being hamstrung into a default position, so make sure you have access to all options for working capital, equipment finance, commercial finance and property finance. In almost every case, you are better to spread your exposure.

3. Working Capital

Working capital is the life blood of the business. Ample working capital ensures you are free to run your business without constraint.

Access to working capital ensures your business is strong and able to resist competitors’ threats, adaptable to change in the market, robust and ready to take on growth opportunities and flexible to respond to short term needs. There are more options for working capital than you might know about. Working capital is much more than bank loans and overdrafts – now’s the perfect time to explore what options might be available to suit your business’ needs.

4. Security

Real estate assets are valuable and you shouldn’t give them away without a fight. Similarly business assets and the debenture charges (AllPaps charges) need to be protected as if the life of your business depends on them. Most business owners don’t understand the implications of these charges so it’s important to talk to your trusted finance partner about your situation.

While you may be required to use collateral security during the foundation phase of your business, you should look to free this up as soon as you can. Don’t let a bank take or retain more security or guarantees than are absolutely essential. Remember, the bank’s first loyalty is to its shareholders and its finance solutions for your business may not necessarily be in your best interest.

Be ready for what’s next

In an ever-changing business environment, it’s important to be constantly looking at profit-driving strategies that can drive success for your business and help you attain competitive advantage. Some strategies we’ve spoken about include business growth, automation, system improvements, expansion, acquisition or new product development but can include other opportunities to take over competitors.

Whatever direction you’re taking your business, you’ll need to have sufficient working capital, equipment finance and property finance. Your finance decisions are critical to the future of your business so treat this seriously and keep the Four Key Finance Essentials in mind.

To discuss what finance options are available to drive your business forward,
call Andrew Sutherland at Halidon Hill Finance, for a discussion on 03 7018 3270 or get in touch via email on